CRB + RIAA = 0 x NetRadio

Last Monday the Copyright Royalty Board (CRB) declined to hear requests to reconsider its ruling that raises the royalties Internet radio stations pay to record labels by about 300%, retroactive to January 2006. It’s widely believed that this move will put small- and medium-sized webcasters into bankruptcy, and will essentially mean the end of Internet radio as we know it.

This is not about whether composers, artists, and labels should be paid — they should. It’s about how much to pay them. It’s about whether a nascent industry will be allowed to grow, independent of the corporate megaliths inadvertently formed by the ill-conceived Telecom Act of 1996.

In my opinion the CRB’s ruling is wrong in so many ways that I scarcely know where to begin, but it’s hostile to both artists and consumers. More ominous still are the rumblings from SoundExchange, the RIAA’s online collection agency, that collecting artist and label royalties from AM and FM radio stations is a good idea, too. Here’s SoundExchange’s John Simson in the Washington Post:

Where webcasters and the recording industry do agree is on the unfairness of making tiny Web stations pay for performance rights while huge radio companies pay nothing. Congress decided that Web stations must pay royalties to the composers of each song and to the performers and record labels, even as traditional AM and FM broadcasters continue paying only the composers — a quirk in the law that gives broadcast radio a huge advantage.

Simson agrees that “there’s really no justification for broadcast radio not paying, and we’re going to try to address that.”

You can read the background on this ruling at RAIN, and can get the legal-beagle 411 at David Oxenford’s Broadcast Law Blog. More importantly, you can send a message to your Congressperson by signing the petition at SaveNetRadio.org. The new rates go into effect May 15th, so please don’t dawdle.